Was there always this much pressure to get rich? Achieving wealth has long been part of the American dream, but now you're expected to want to marry a millionaire, be a "Survivor," win American Idol -- or at least look as if you know people who know Paris Hilton. Even personal finance books, which once just explained how to manage money, now insist that you do whatever it takes to get rich.
Suze Orman urges readers to find The Courage to Be Rich. David Bach cautions that only Smart Couples Finish Rich. Robert Kiyosaki's Rich Dad, Poor Dad series is all about overcoming negative parental influences so you can be rich. And just last week I saw yet another book: Nice Girls Don't Get Rich. Oh, well.
I'm not rich, in case you were wondering. I'm not even a taxi ride away from rich. My husband and I rent our apartment in Brooklyn. We suffer through endless repairs on our Catskill fixer-upper and our aging Subaru. While I'd love to snag a windfall as much as anyone else, I'm exhausted by all this emphasis on wealth. It's like some National Geographic special: Rich -- The Ultimate Destination.
The danger in buying into the idea that you're going to be rich is that you'll spend accordingly -- regardless of the impact on your personal financial health. Consider the following:
Personal savings rates are the lowest they've been since the US Federal Reserve started tracking this data in 1946.
US consumer debt has reached a high of US$2.1 trillion (and that doesn't include mortgages).
From 2001 to 2003 Americans cashed out US$333 billion worth of equity from their homes -- and spent 51 percent of that paying down other debts and covering expenses like rent and groceries.
The trouble comes not just from wanting to be rich, but feeling entitled to it. A 2003 Gallup poll found that about a third of Americans said they expected to be rich some day -- and 51 percent of those with incomes of US$75,000-plus felt that way. A recent Times poll had slightly different results, with just over half of respondents saying it was unlikely they would get rich, while 45 percent thought it was very or somewhat likely.
What's interesting, according to Thomas DiPrete, a professor of sociology at Columbia University, is that most people don't have a realistic idea of what "rich" means.
For example, in that Gallup poll, only 8 percent of people said that they'd need an income of US$1 million a year to be rich. The median response was US$122,000. That's a lot more than the average American makes, but it won't even cover the cost of owning a small, private jet (let alone flying in it).
DiPrete analyzed income data going back to 1968 to gauge whether people at various income levels were likely to become rich. I'll spare you the standard deviations, but basically, it's really, really, really unlikely that even the above-average Jack or Jill will ever hit that million-dollar-a-year threshold. Someone earning US$120,000 today, in fact, has only a 19 percent chance of making US$340,000 within the next 15 years.
The rest of us are left holding our lottery tickets -- and then going shopping. Why not buy something expensive? You can't be overextended if you're going to win big one day.
While DiPrete hesitated to link expectations of wealth and levels of consumption, he said that when people believe they'll be able to afford their current purchases in their (richer) future, "that makes it safer to go into debt."
Sadly, I know the havoc that results when you think outside your wallet.
My credit cards could tell you all about it. So here's one solution: forget rich. It would free up so much time and energy if "get rich" got crossed off everyone's to-do list. Trying to live a sane, productive financial life is hard enough. (I could use some of that energy to shore up financial essentials, like the pale, quivering mess that is my IRA.)
I'm sure most people would rather hear their odds of getting rich are great. I'd love to believe it myself. But accepting that you aren't going to be snuggling into the lap of luxury any time soon can be a blessing.
Smart people may finish rich, but they probably won't. How about a book called: "Smart People Finish Just Fine, Thanks." It's not sexy and it may never be a best seller, but downshifting from a focus on wealth could do more to enhance your bottom line than you ever dreamed.
Japan has deployed long-range missiles in a southwestern region near China, the Japanese defense minister said yesterday, at a time when ties with Beijing are at their lowest in recent years. The missiles were installed in Kumamoto in the southern region of Kyushu, as Japan is attempting to shore up its military capacity as China steps up naval activity in the East China Sea. “Standoff defense capabilities enable us to counter the threat of enemy forces attempting to invade our country ... while ensuring the safety of our personnel,” Japanese Minister of Defense Shinjiro Koizumi said. “This is an extremely important initiative for
MORE POPULAR: Taiwan Pass sales increased by 59 percent during the first quarter compared with the same period last year, the Tourism Administration said The Tourism Administration yesterday said that it has streamlined the Taiwan Pass, with two versions available for purchase beginning today. The tourism agency has made the pass available to international tourists since 2024, allowing them to access the high-speed rail, Taiwan Railway Corp services, four MRT systems and four Taiwan Tourist Shuttles. Previously, five types of Taiwan Pass were available, but some tourists have said that the offerings were too complicated. The agency said only two types of Taiwan Pass would be available, starting from a three-day pass with the high-speed rail and a three-day pass with Taiwan Railway Corp. The former costs NT$2,800
NEW LOW: The council in 2024 based predictions on a pessimistic estimate for the nation’s total fertility rate of 0.84, but last year that rate was 0.69, 17 percent lower An expected National Development Council (NDC) report expects the nation’s population to drop below 12 million by 2065, with the old-age dependency ratio to top 100 percent sooner than 2070, sources said yesterday. The council is slated to release its latest population projections in August, using an ultra-low fertility model, the sources said. The previous report projected that Taiwan’s population would fall to 14.37 million by 2070, but based on a new estimate of the total fertility rate (TFR) — the average number of children born to a woman over her lifetime — the population is expected to reach 12 million by
COUNTERING HOSTILITY: The draft bill would require the US to increase diplomatic pressure on China and would impose sanctions on those who sabotage undersea cable networks US lawmakers on Thursday introduced a bipartisan bill to bolster the resilience of Taiwan’s submarine cables to counter China’s hostile activities. The proposal, titled the critical undersea infrastructure resilience initiative act, was cosponsored by Republican representatives Mike Lawler and Greg Stanton, and Democratic Representative Dave Min. US Senators John Curtis and Jacky Rosen also introduced a companion bill in the US Senate, which has passed markup at the chamber’s Committee on Foreign Relations. The House’s version of the bill would prioritize the deployment of sensors to detect disruptions or potential sabotage in real-time and enhance early warning capabilities through global intelligence sharing frameworks,
RSS